Gold and silver under pressure: the bearish pattern of silver alarms bullish investors

Technical pressures continue to weigh on precious metals markets. During the Wednesday afternoon session on January 7, during trading in the United States, both gold and silver experienced significant declines. The March silver futures saw a more pronounced contraction, dropping to $78.22 per ounce (loss of $2.819), while the gold price per ounce today settled at $4,467.2 for the February contract, down $28.9. These downward movements mainly reflect short-term traders taking profits.

The formation of the double bottom pattern worries long positions

The particularly critical trend concerns silver, where the daily COMEX chart analysis reveals the possible formation of an inverted double top pattern. If confirmed, this scenario could trigger further downside pressure. According to traditional technical analysis principles, pattern confirmation will depend on surpassing the intermediate low between the two peaks, set at $69.255 per ounce. Below this crucial level, analysts anticipate a concentration of pre-set stop-loss orders, which could further amplify the declines.

The daily evolution of silver prices remains the main barometer also for gold. Long operators adopted wait-and-see positions mid-week, discouraged by strong technical resistances near historic highs. For the February gold futures, the next significant upside target is represented by surpassing the level of $4,584.00 per ounce (historic contractual high), while the critical technical support for shorts is at $4,200.00 per ounce.

Technical resistance maintains market control

Current resistances remain robust: yesterday’s high for gold is at $4,512.40 per ounce, with the next obstacle at $4,550.00. For silver, immediate resistance is at $79.00 per ounce, followed by $80.00. In case of downward corrections, the gold price today could find support at the daily low of $4,432.90, while for silver, the nearby support is at $75.70 per ounce.

Central banks support demand for yellow metal

Despite short-term volatility, fundamentals remain supported. The Chinese People’s Bank has entered its fourteenth consecutive month of gold reserve accumulation, adding 30,000 ounces in the previous month. Since November 2024, when the current purchase cycle began, the Chinese central bank has accumulated approximately 1.35 million ounces (about 42 tons). These accumulations reflect significant official demand in a context of record-high prices.

In the broader macroeconomic context, gold has benefited from multiple factors: confidence-diminishing operations in currencies (with investors shifting from sovereign bonds to store-of-value assets), persistent geopolitical tensions, and institutional purchases. As a result, gold recorded its best annual performance since 1979.

Global market context

The US dollar index showed a slight strengthening. Crude oil fell to around $56.50 per barrel, while the 10-year Treasury yield remains around 4.15%. These movements in related markets will continue to influence the trajectory of precious metals in subsequent sessions.